What Is the Expected Real Rate of Interest for an Account

question 9

Multiple Choice

What is the expected real rate of interest for an account that offers a 12% nominal rate of return when the rate of inflation is 6% annually?

• A) 5.00%
• B) 5.66%
• C) 6.00%
• D) 9.46%

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Definitions:

Telegraphic Speech

A stage in language development where a child speaks in short, simple constructions, omitting unnecessary words but conveying the message, similar to a telegram.

Shaping

In learning theory, the gradual building of complex behavior patterns through reinforcement of successive approximations of the target behavior.

Expressive Vocabulary

The set of words a person can actively use in speech or writing.

Holophrase

A single word that is used to express complex meanings.